Outdoor advertising company QMS Media is believed to be knocking on the door of Champ Private Equity in the hope that the buyout fund will acquire the business after recently being in the crosshairs of one of Champ’s rivals.
It is understood that a private equity fund has recently run the ruler over QMS, but now the thinking is that the business has been put before the dealmakers at Champ.
Champ, which was contacted by DataRoom yesterday but did not comment, made a windfall through the acquisition of the QMS rival oOh!media, selling the business through an initial public offering in 2014 for a price that set its market value at more than $400 million — its current market value is now double that.
Champ purchased the business in 2011 after launching a takeover bid for $170m.
The private equity hype surrounding the billboard and street furniture operator comes as its share price languishes at 72.5c — down from $1.39 in 2016 and taking its market value to $239m.
One of the challenges for QMS has been the round of industry consolidation last year, in which JC Decaux purchased APN Outdoor for $1.12 billion and oOh!media acquired the outdoor operations of Here, There and Everywhere, leaving the business predominantly as a radio station owner.
QMS owns assets in the Australian and New Zealand market, and the attraction for private equity has been the level of advertising the company generates.
However, some believe its recent merger of its New Zealand operations with Mediaworks could act as somewhat of a poison pill when it comes to private equity, given that most do not want exposure to free-to-air television while it struggles to compete with digital streaming services such as Netflix.
Some analysts believe they may also be averse to its QMS Sport division, which sells ads for sports events at stadiums.
As revealed online by The Australian earlier in the week, QMS has poached former APN Outdoor general sales manager Mark Fairhurst to become its Australian general manager.
Should Champ be serious about an acquisition of QMS, it would come as it works on the sale of its worksite surveillance, temporary fencing and height safety business ATF Services through Allier Capital.
The business generates about $20m in earnings before interest, tax, depreciation and amortisation annually.
It also comes as private equity remains active globally.
In Bain and Company’s 10th annual Global Private Equity Report, it says private equity funds produced buyouts in 2018 worth $582bn and $2.5 trillion over five years
Bain said the past five years had been some of the best in the private equity industry, with some of the highest levels of capital raised and put to work and the most lucrative sales and returns achieved.
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